Companies, be Responsible for all Your Impacts

Every year I create a list of the best sustainable business books—in addition to lists of sustainability (non-business) books and (non-sustainability) business books. I noticed that the list was showing more and more convergence. Whereas previously the list could be easily separated, now many sustainability books discuss the impact of business institutions, and business books increasingly discuss one or more sustainability issues.

Another thing I’ve noticed is that the best books, for my taste, appear mostly in the first half of each year. Last year, for example, the books Principles of Sustainable Business by Rob van Tulder and Eveline van Mil and Deeply Responsible Business by Geoffrey Jones, which I chose as top and second place, were published very early.

This year I waited quite a long time before I felt like I had found a candidate for the best sustainable business book in 2024. The Profiteers: How Business Privatizes Profits and Socializes Costs written by Christopher Marquis is the strongest link to my mind and heart until now. Even if this book is not at the top at the end of the year, I believe it will be in the top three.

Marquis, the author, was by no means an ordinary person. He earned his doctorate in sociology and business administration from the University of Michigan. After that, he was a professor of social innovation at Harvard Business School for ten years, and in between also served as a professor at Harvard Kennedy School. From there he moved to Cornell University and became a professor in global business sustainability. Currently, he teaches at Judge Business School, Cambridge University.

As far as I remember, Marquis had only published two books before The Profiteers , even though he had published more than 20 articles in prestigious journals, more than 50 case studies published at Harvard University, and who knows how many hundreds of his popular articles appeared in various mass media. Both books received various prestigious awards. Better Business: How the B Corp Movement is Remaking Capitalism is his first book. The book, published in 2020, was the winner of the Axiom Gold Medal in the business ethics category. His second book, Mao and Markets: The Communist Roots of Chinese Enterprise, written with Kunyuan Qiao, was published at the end of 2022. The Financial Times declared it one of the best books of 2022 , and was also awarded the Axiom Gold Medal in the business book category.

Judging from the title of this third book, I had assumed that its content would primarily be a critique of business from a sustainability perspective, like Marjorie Kelly’s powerful work published last year, Wealth Supremacy: How the Extractive Economy and the Biased Rules of Capitalism Drive Today’s Crises . Given Marquis’s reputation as a topnotch writer, I ordered this book anyway, and hoped to at least read a new and coherent critique. If there were additional points of new criticism beyond those launched by Kelly, I would be satisfied.

As it turned out, my expectations were far exceeded by Marquis. Marquis’s third book is divided into 3 parts. First, about how the majority of businesses actually loot profits by making us all pay for the negative environmental and social impacts they produce. Palgulipat and these business tricks are discussed in the first two chapters, which are actually most related to the title of the book chosen by the Marquis.

According to Marquis, the current system was deliberately built with incentives for companies to at least confuse stakeholders as to who was actually responsible for the damage. In this section, Marquis explains that even Stakeholder Capitalism and Environmental, Social, and Governance (ESG) which are predicted to be good for companies are still inadequate to ensure company accountability for the impacts they cause.

One of the things that many stakeholders accept is win-win logic . The company knows that this proposition is very attractive to stakeholders who previously often felt their interests were defeated. However, said Marquis, companies can actually hide behind this proposition by only taking actions that are good for stakeholders when it also benefits the company. In fact, if a company has a negative impact, then that impact must be managed properly: what was damaged must be restored, those affected must be compensated, and this must not happen again. This is clearly unprofitable for the company—at least in the short term—but it is clearly the only right thing to do.

The second part of the book taught me a lot of new things. In five chapters Marquis discusses how various innovations implemented by business—although not all of them originate from this sector—are actually making many improvements. Each chapter discusses business solutions related to carbon emissions , environmental damage, cheap products, cheap labor and economic inequality, and systematic discrimination. Marquis is careful to show that change clearly occurred because of these solutions, but also convincingly discusses their limitations.

These limitations, in Marquis’s view, often stem from false dichotomies. Take for example Grove Collaborative, a company providing household products—from soap to pet food—which was only founded a decade ago. This company has thought carefully about all its products and packaging, so that they truly reflect the sustainability values ​​they promise to all their stakeholders.

The company is seriously discussing the possibility of using plastic for packaging , with a willingness to recycle all its plastic waste. But in the end they decided to use packaging that was truly better for the environment rather than using plastic which would still increase plastic production even though it would be recycled at the end of its useful life. The pros of recycling, according to the Grove Collaborative, do not need to be confused with efforts to reduce consumption of the product from the source. Companies can of course strive for more efficient use of fossil fuels, and at the same time carry out a transition to renewable energy .

In the third part, consisting of four chapters, Marquis discusses how more systemic solutions can emerge. For him, the solution must produce a regenerative economy. The method? Marquis proposed solutions in the form of changes in governance, finance, corporate activism and consumption. Each is covered in a truly satisfying chapter.

Marquis clearly wants to give the message that there are many companies with bad intentions in this world. However, there are also many companies that are not like that. They strive seriously for fairer and more sustainable business practices. They also do a lot of advocacy so that all business processes and profits received by the company can become a source of collective prosperity, and environmental management practices can become better with negative impacts continuing to decrease. However, to truly be a systemic solution, companies must advocate for higher, more strictly enforced sustainability standards, not seek to relax them. Collaborative work with all stakeholders who also have sustainability goals—even though they have different tactics—is a necessity for this systemic improvement.

Apart from these eleven chapters, Marquis closes his book in a concluding chapter. In that chapter I learned that Marquis was a student of Mayer Zald, the most prominent figure in the new social movement, and one of my heroes. Marquis’s final reflection even utilizes Zald’s three requirements of systemic social change: mobilization of diverse stakeholders; consistent new narrative; and optimization of structure utilization and appropriate timing . Marquis says he sees all three now, so a shift in business toward a regenerative economy is very possible in the near future. However, it requires collective decisions and actions from all of us, especially regarding the third requirement of Zald.

Marquis is very aware that what the protagonists in the corporate sustainability play are fighting for, as part of world sustainability, is not easy. Radical new ideas will always meet resistance from those who have so far enjoyed the benefits of business as usual conditions . So far, companies have been excused, permitted, and even given incentives to pass on costs for their negative impacts to the wider community and keep the profits for themselves. This book encourages full corporate accountability for its negative impacts, and not simply pursuing sustainability initiatives when there are clear short-term financial benefits for the company. Obviously, this idea will not be easily accepted, but Marquis has shown that many companies have attempted it with varying motivations, and many stakeholders have coerced, cajoled, and helped companies in their efforts.

When I finished reading this book, I smiled because I felt I had found a candidate for the best sustainable business book this year. Then I hope that many people can read it directly, and act together to realize a regenerative business and economic system. Hopefully it can really be realized in the not too distant future, so that humanity can be safe and enjoy a good future.

Book Identity

Source: https://jbr.id/resensi/perusahaan-bertanggungjawablah-atas-seluruh-dampakmu-7452/

Book Review Writer: Member Board of Supervisors ICSP – Jalal

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